DTN Closing Grain Comments

Row Crops Show Slight Bounce

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 2 1/2 cents in the September contract and up 2 1/2 cents in the December. Soybeans were up 7 cents in the August contract and up 5 3/4 cents in the November. Wheat closed down 1/2 cent in the September Chicago contract, down 3/4 cent in the September Kansas City, and up 4 1/4 cents in the September Minneapolis contract.

The September U.S. dollar index is down 0.27 at 92.63. December gold is down $4.30, at $1,275.10, while September silver is down 11 cents and September copper is up $0.0025. The Dow Jones Industrial Average is up 41 points at 22,005 points. September crude oil is up $0.46 at $49.62. September heating oil is up $0.0165, while September RBOB gasoline is down $0.0159 and September natural gas is down $0.009.

Corn:

December corn closed up 2 1/2 cents Wednesday with traders hesitant to break new lows ahead of USDA's next WASDE report on Aug. 10. The 2017 corn crop has consistently been given the lowest crop ratings by USDA since 2012, but so far, $4.17 has been the best bid December corn could summon and prices did not last long in early July at that level. The 2.37 billion bushels of old-crop ending corn stocks has been one bearish influence and this week's forecasts for broad rain coverage around the Midwest with lower temperatures is another. The rain forecasts are not iron-clad however, and it looks like only light amounts will be available in the western and central Midwest. On the demand side, ethanol producers are struggling with leaner margins lately, but last week's production stayed high, at 1.002 million barrels per day while inventory dropped from 21.5 to 20.9 million barrels -- so supplies are still moving. With no clear handle yet on the size of the 2017 corn crop, December corn continues to trade within its sideways range and is holding above support at $3.75. DTN's National Corn Index closed at $3.20 Tuesday, priced 42 cents below the September contract and at the low end of its sideways range in 2017. In outside markets, the September U.S. dollar index is down 0.27, a delayed reaction to Wednesday morning's news from ADP that new private sector jobs totaled 178,000 in July, less than was expected reported RTTNews.com.

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Soybeans:

November soybeans closed up 5 3/4 cents in a quieter day of trading as the market digested Tuesday's quick 35 1/2 cent drop. The latest seven-day forecast still expects broad rain coverage over the eastern two-thirds of the U.S., but forecast amounts are lighter in the central U.S. where row crops could use more. With soybeans headed into their pod-setting stage, this week's rain is a potential boost for crops, but as always, actual rain amounts will need to be monitored as forecasts have been known to be overly-generous at times. In addition to weather concerns, several news sources are also reporting that President Donald Trump is getting ready to challenge China, the world's largest buyer of soybeans, on trade -- an especially sensitive topic for soybean prices. Given this year's wide variety of weather challenges and high degree of uncertainty ahead, it seems fitting that November soybeans are trading within a few cents of the middle of 2017's price range. Technically, the trend in soybeans remains up in spite of Tuesday's sell-off, and still contrary to soybeans' bearish seasonal tendency for this time of year. DTN's National Soybean Index closed at $9.01 Tuesday, priced 70 cents below the November contract and continuing to fall back from its highest price in four months. Among August contracts, there were 567 deliveries of soybeans, 181 deliveries of meal, and 786 deliveries of soybean oil early Wednesday.

Wheat

September Chicago wheat closed down a half-cent, pressured by a seven-day forecast that is expecting moderate-to-heavy rains across the Southern Plains, an early help for fall planting. While the Pacific Northwest is dealing with extreme heat, conditions are also dry enough for the concluding rounds of this year's winter wheat harvest. Also, North Dakota received widespread coverage of light-to-moderate showers Wednesday which will be helpful to the spring wheat fields that were fortunate enough to escape this year's drought. Over the past four weeks, winter wheat prices have lost their buying enthusiasm related to drought and prices are now searching for support near the same trading range they had in May, before drought concerns emerged. Spring wheat prices are holding up better, but they also have disconnected from drought concerns and are looking for a higher level of support to accommodate this year's smaller U.S. spring wheat crop. DTN's National SRW index closed at $4.30 Tuesday, priced 31 cents below the September contract and down nearly a dollar from its highest price in two years. DTN's National HRW index closed at $3.96, also down from its highest price in two years.

Todd Hultman can be reached at Todd.Hultman@dtn.com

Follow him on Twitter @ToddHultman1

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Todd Hultman